3. Preliminary Scoping Memo: Scope of the Proceeding

This new Rulemaking divides the critical tasks into three issue areas:

3.1. CSI Review, Evaluation, and Program Oversight

This proceeding will be the vehicle for the Commission to carry on its work implementing all prior CSI orders from R.08-03-008 and earlier rulemakings. This work will include the general market CSI incentive program as well as the MASH, SASH, RD&D, and CSI Thermal Programs. The Commission has largely accomplished the tasks it outlined for itself in R.06-03-004 and R.08-03-008 relating to CSI. The Commission's CSI general market program has, since 2007, allocated slightly more than $700 million in incentives to over 29,000 installed solar projects representing 320 MW of new solar capacity.2

Critical policy areas that the Commission plans to examine in this rulemaking with regard to the various CSI sub-programs include:

In D.10-01-022, the Commission established the CSI Thermal Program to provide incentives to solar water heating (SWH) systems pursuant to Assembly Bill (AB) 1470. AB 1470 requires the Commission to provide not less than 10% of the overall program funds for installation of SWH systems on low-income residential housing, as defined in the statute. (Pub. Util. Code § 2866.)3 In adopting D.10-01-022, the Commission set aside $25 million for this low-income CSI Thermal Program, but details of implementation remain to be addressed. We intend to finalize the details of a low-income CSI Thermal Program in this rulemaking.

In D.08-10-036, the Commission established the MASH program of solar incentives for multifamily affordable solar housing. As part of the MASH program, the Commission directed Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company to file tariffs for a "virtual net metering" (VNM) program that allows the electricity produced by a single solar installation to be credited to the benefit of multiple tenants in the building. Ordering Paragraph 6 of the decision directed the Administrative Law Judge (ALJ) to issue a ruling to explore expansion of the VNM tariff to all multitenant properties that install solar energy systems. We intend to explore this issue in this rulemaking.

In D.07-05-047, interim marketing plans were adopted for the general market CSI program. In R.08-03-008, we stated that the Commission would consider policy guidance to the CSI program administrators4 regarding permanent marketing budgets and programs and consumer education and protection measures. While the Commission was unable to address this issue in R.08-03-008, we anticipate addressing this issue in this new rulemaking.

In R.08-03-008, the Commission described the energy efficiency audit requirements established in D.06-01-024 for CSI applicants as well as statutory modifications enacted by SB 1 that direct the CEC to require "appropriate energy efficiency improvements in the new or existing home or commercial structure where the solar energy is installed" (Public Resources Code Section 25782(b)(3)), and direct this Commission to require "reasonable and cost-effective energy efficiency improvements in existing buildings as a condition of providing incentives...." (Public Utilities Code Section 2851(a)(3)). Although the scoping memo for R.08-03-008 stated the Commission's intent to address energy efficiency requirement issues, time and resource limitations prevented the Commission from addressing the issue. In this rulemaking, we may consider whether to require additional energy efficiency improvements, as described in Section 2851(a)(3).

In D.06-08-028, the Commission indicated it would review major aspects of the CSI program every two years based on new information on solar costs, federal tax credits and other solar market conditions and factors. The review's purpose would be to identify potential improvements in CSI program design and to determine if revisions to CSI incentive mechanisms are warranted. In R.08-03-008, we anticipated that the first evaluation would take place in 2009, after two years of experience with the program and we described development of a Program Evaluation Plan to gather needed data. An Assigned Commissioner's Ruling in July 2008 established the CSI Program Evaluation Plan and described a comprehensive set of data and reports for program evaluation purposes.5 Subsequently, in D.09-08-026, we adopted a cost-benefit methodology to be used in evaluating our various DG incentive programs.

Now that many of the reports outlined in the assigned Commissioner's July 2008 Program Evaluation Plan ruling have been completed, the Commission can use these reports, coupled with workshops and/or opportunities for comments by interested parties, to consider CSI program modifications. Examples of program areas where the Commission may consider revisions to current program requirements include, but are not limited to:

3.2. SGIP Review, Evaluation, and Program Oversight

This rulemaking will be the vehicle for the Commission to carry on its work implementing all prior SGIP orders from R.08-03-008 and earlier rulemakings. The SGIP was adopted by the Commission in D.01-03-073 and provides incentives to business and individuals who invest in distributed generation. The Commission's SGIP has so far encumbered more than $747 million in incentives and motivated more than 430 MW of DG capacity through 1,447 projects since 2001. These projects represent approximately $2.1 billion in private investment in DG technologies. In our previous DG rulemakings, we refined our interconnection rules, revised incentive payments, and addressed budgetary and policy issues surrounding SGIP. Most recently, in R.08-03-008, we allowed incentives for advanced energy storage technologies coupled with wind and fuel cell projects (D.08-11-044) and allowed directed biogas to qualify as a renewable fuel for SGIP eligible facilities (D.09-09-048).

In 2009, the legislature enacted SB 412, which authorizes the Commission, in consultation with the CARB, to determine eligible technologies for the SGIP based on the requirement that they "achieve reductions of greenhouse gas emissions pursuant to the California Global Warming Solutions Act of 2006." In a ruling of November 11, 2009, the ALJ solicited comments from parties regarding implementation of SB 412 through SGIP. A workshop was held on this topic on January 7, 2010.

In this proceeding, we will address whether changes are needed to SGIP to comply with SB 412, and, as needed, any policy, legal, or administrative issues that arise in the broad context of DG or within the ongoing SGIP. These may include, but are not limited to funding levels, incentive amounts, and program modification requests. We will also consider changes to incentive levels and technologies as market conditions change, as long as the changes are in compliance with Section 379.6. Our ongoing collaboration with the CEC will help us to understand and incorporate new DG technologies when and if they become viable, and if they comply with the program guidelines in Section 379.6.

3.3. Ongoing DG Policy Development and Review

In this proceeding, the Commission will carry on its work begun in prior DG rulemakings to implement net energy metering issues as they arise and DG interconnection for customer-side of the meter projects, including ongoing implementation and refinement of the utilities' Rule 21 tariffs.

2 See California Solar Statistics at: http://www.californiasolarstatistics.ca.gov.

3 All statutory references are to the Public Utilities Code unless otherwise noted.

4 The CSI program administrators are the California Center for Sustainable Energy, PG&E, and SCE.

5 See "Assigned Commissioner's Ruling Establishing Program Evaluation Plan f or the California Solar Initiative," July 29, 2008, R.08-03-008.

Previous PageTop Of PageNext PageGo To First Page